Israel must halt new building plans for settler homes in the West Bank, the European Union's foreign service said in a statement on Wednesday, warning that such settlements threatened any future peace deal with the Palestinians, the Daily Mail reported.

"The European Union has requested clarifications from Israeli authorities and conveyed the expectation that they reconsider these decisions, which are detrimental to on-going efforts towards meaningful peace talks," the statement said.

"All settlement activity is illegal under international law, and it undermines the viability of the two-state solution and the prospect for a lasting peace."